Royal Mail boss Moya Greene is to be hauled in front of MPs to justify the postal company’s controversial plan to introduce sweeping price rises, which will see direct mail prices soar and second class stamps rise by 50%.
MPs on the Business, Innovation & Skills committee have announced a new inquiry into “stamp price regulation” and plans to overhaul the post office network.
The first public evidence session will be next week, on February 21, when the MPs will take oral evidence from postal regulator Ofcom and watchdog Consumer Focus. It is not known whether the direct marketing industry will be represented.
Royal Mail chief executive Greene is likely to be called to give evidence on February 28. A committee spokesman said the investigation would “examine whether the most basic postal service is becoming too expensive”.
The increases have been triggered by Ofcom’s proposal to let Royal Mail set its own prices. The DM industry claims the move, which is still under consultation, will spark a mass exodus of direct mailers, and hasten the decline of the postal service.
And the DMA recently highlighted that the proposal will spark a VAT bombshell, adding millions of pounds to financial services and charities mailing costs.
At the time, DMA chief of operations Mike Lordan said: “These additional costs could well prove to be the final straw for many companies which will abandon the medium in favour of more competitively-priced marketing channels.”
A Royal Mail spokesman was quoted as saying: “It is never easy to ask for a price rise but they are needed to ensure the sustainability of the universal service.”
Related stories
Mail revamp sparks VAT bombshell
Royal Mail to set its own prices
Industry warns of direct mail exodus
